The First-Time Home Buyer’s Guide

I’m Vern. I run the top mortgage brokerage in Massachusetts with over 20 years of experience. I’m Craig. I’ve done $100 million consistently since my second full year in the business and I’m Massachusetts’ top mortgage broker. We’re the Mortgage Daddies with real advice, real stories, and real results. Let’s get going. Welcome back to Mortgage Daddies. Today we are going to be talking about the process for a homebuyer, kinda the A to Z in the mortgage process. Uh, we’re gonna answer a lot of questions that I think are gonna be great for somebody who’s thinking about buying their first house and they kinda don’t know, you know, what the process looks like, what to expect. So, we’ve put together a bunch of, kinda questions for you guys that we’re gonna answer, and hopefully it’s helpful. Awesome. Uh, yeah, looking forward to it. Um, we gotta jump right into this. I think, uh, it’s gonna be a lot of education on this, on the home-buying process. Uh, we’re gonna kick this off. I’m just gonna ask Craig a bunch of questions. Um, you know, let’s give the listeners a rundown of the process of getting pre-approved and what to expect from their loan officer. Yeah. So, you know, during the process of getting pre-approved, thereWh- when you start, you know, you’re gonna need to fill out an application or give the loan officer your application so that they can confirm your work history, they can confirm the assets that you have. They’re gonna need to check your credit. They’re gonna need to be able to run findings to properly pre-approve you. And they’re gonna need to verify your documents. Do you getI- I get it a lot, so I’m sure you do, is the question, “Do I need to provide all my documentation to get a pre-approval?”It’s- this is the biggest question we get. Yeah. So, for me, I- I think you do. You know, I think that anybody that’s going to issue a pre-approval without confirming the documentsNow, there’s ways that you can get around the document side of things with some verifications of employment now- Yeah. verifications of assets. You don’t necessarily have to provide your documents, but you have to provide a way for the loan officer that you’re working with to be able to verify your income. If you are going to get pre-approved by somebody who is not going to verify any documents, they’re just gonna take what you tell them and they’re gonna run with itNow, some people would be fine with that because, you know, maybe their salary, nothing changes, but there’s so many people that are gonna have incorrect pre-approvals. They’re gonna go look for houses. They’re gonna get their hopes up. They’re gonna go under contract. Their realtors are gonna show them a bunch of houses. They’re gonna get their offer accepted. Once that loan officer gets your paperwork, everything gets reviewed, doesn’t line up with what you said, the income varies, it’s not full-time, you know, the assets aren’t where they’re supposed to be, you have problems and you get denied for a loan. And then, not only is the realtor gonna be upset, the listing agent’s gonna be upset, the loan officer is gonna look terrible in that situation, but the buyer’s gonna be out a bunch of money as well, and that’s where I think a lot of people don’t understand. Like, “Oh, I don’t wanna provide that stuff. I d- I’ve never needed to do that before. You know, I’ve had people who’ve pre-approved me without doing this. “Well, do you wanna pay for a home inspection?Do you wanna pay for an appraisal?That’s over $1,000 right there, to then find out that you don’t qualify for the house. Yeah. M- one of my big things, like, when I was really busy and doing a lot of loans is, obviously, the buyer is our number one priority, but I’d always put myself in the shoes of the seller, right?Like, if I’m the seller, I wanna make sure that these guys have verified their income and assets. And especially in this day and age, y- you said findings, and a lot of people don’t know what findings are, but you run these automated findings. If you don’t have accurate income from their pay slips and W-2s, there’s a lot of things that go into that, uh, variable income, overtime, bonus income, how long they’ve been getting that for. And I believe, like, the average homebuyer who’s not done this before or hasn’t really gone through the process to really understand it and had a, you know, a thorough pre-approvalI mean, you are probably one of the most thorough loan officers I’ve ever been around, of just getting super detailed, granular in explaining that out to the homebuyer of why they need to- to- to provide all this, and that’s really what we’re trying to get through today on Mortgage Daddies, is how important having the conversation and educating that homebuyer is. And you’re amazing at that. But, uh, you know, for the- for the viewers out there that are looking to get pre-approved properly for a mortgage, there’s a lot that goes into it other than just saying, “Hey, here’s my pay stub,” or, “Hey, I make $100,000 a year. I make $75,000 a year. “It’s like, how did you make the $100,000?Is that just a straight salary, it never changes, and that’s how it’s been for the last 2 years?Um, you know, what are the- what are the- some of the things that you’re looking for on somebody’s tax returns?I get that a lot. “Well, you already have my pay stubs. This is where I’ve been. I’ve been at the house, the, you know, the job for 3 years. “But, you know, what if they own an investment property and they write off a bunch of, you know, depreciation or, you know, they had some- some- Yeah. rehab work?I think, uh, you know, how a- a lot of buyers don’t understand is how income’s looked at for a mortgage. You could be a W-2’d employee for the last 5 years, but your income could have changed on how you get paid,Maybe you were salary originally, now you’re commission. Well, there has to be a certain amount of time that you’re commission, or maybe you used to work a lot of overtime and now you don’t, and that’s different. Like, you can’t just look at somebody’sYou can’t- you really can’t even just look at somebody’s W-2 and tell if somebody works a lot of overtime or bonus or commission on exactly what income could be used. Now, there’s times where the income is- should be plenty high to where it’s not- Yeah. really a problem for what they’re looking for, but every income is looked at separately. So you have base income, you have overtime, you have bonus, you have commission. Those things get averaged separately. There has to be a certain amount of time that you have them, and they can’t be declining. So when- if somebody just looks at one document, it’s impossible to be able to tell, or if somebody just looks at your tax returns and they see, oh, well, W-2 earnings, you know, Vern showed $100,000 last year, showed $100,000 the year before. okay, 80% of the time you might be okay. Yeah. Right?You know, and that might be the case. It might be b- salary or it might be base, but that 20% of the timeAnd for me, I don’t wanna risk 2% of the time, never mind 20%- Yeah. of the time, because that income could have shifted. It could have changed from base to s- to, uh, overtime or vice versa, or the company could change, or- or where they work, you know, their pay structure. You know, I do a lot of loans for nurses. I do a lot of loans- was thinking that same thing. Yeah. Nurses scare me the most. Out of everybody. brutal because, you know, a lot of nurses are not 40 hours a week- Yeah. and how they get paid is different, you know, or they go take a traveling position and how that gets paid is different. So, it can be pretty challenging and when you can just get all the documents, you get the full story ahead of time, it makes things a lot easier. And then for your self-employed people-Or you people who own rental properties, you know, that’s a big one that comes up. “Well, I bought this house before and I got to use the rental income and this is what I get. “Well, it’s different now. It’s like a business. Yeah. You know, so what you write off and what you show for deductions is going to bring down what that income is. So you have so many people that, you know, their goal is to be able to buyThey buy a multifamily, and then a year or 2 later they come back to you. Now they wanna buy that single family. Yep. Or maybe they wanna buy another multifamily and better their situation. Okay, great. They qualified fine the first time, but now they come back, they can’t qualify again because they wrote off so much that that- that rental property is no longer covering itself or no longer at $3,000 a month worth of net income. You’re at 500 and now you’re carrying that whole mortgage payment because you wrote off everything. So, you know, when you work with a loan officer, and I- I do that a lot with the clients is, you know, “What are your goals long term so that we can make sureI don’t want you to go file your taxes next year and go write off everything ’cause your accountant’s trying to save you money. “Great. Love that you don’t have to pay taxes. But at the same time, do you wanna not be able to buy a house because of that?Yeah. Yeah, that’s- that’s a huge one is when you- when you see somebody and they come in, they have the W-2 and it shows 100,000. We’re just gonna use 100,000 for- for an example. They bought a three family 3 years ago. They’ve been writing everything off through their accounts, and next thing you know, they’re like, “Well, I still make my 100,000 as my W-2. Just use that. “And you’re like, “No, you’re showing $1,000 loss every month. “So now, you know, 12 months in a year, $100,000 W-2, now you’re down to 88,000 and you’re still carrying that other- th- the mortgage outside. So yeah, it’s tough. Um, I get this a lot too. “Why do you need to pull my credit, Craig?”Like, “Why do we need to pull that?”And that’s a big topic right now between soft checks and hard credit pulls. Uh, you know, the industry kind of changed over the last like 18 months. You saw a lot of people saying, “We can do a soft check for you. “But, you know, more recently over the last 60 days, the information doesn’t seem as accurate. So can you just tell the viewers, you know, the importance of pulling the credit report, hard credit versus soft credit check?Yeah. I- if you wanna buy a house and you don’t want to have any issues, you need to have your credit run for a hard pull. A couple of things can happen. You can do a soft check on somebody’s credit. Credit score could look great. You’ve run everything, numbers look fine, your debt-to-income looks fine. Everything should work. And again, kind of talk about percentages. 75% of people are probably gonna be fine. Nothing’s gonna change. Yep. But there’s 25% that something could change and happen by the time 2 months later when now you go under contract on a house. Well, now we have to do a hard pull- Yeah. to send the loan into underwriting to be able to run findings. Well, now when you do that hard pull, what happens when usage on one of your credit cards went up and you thought, “Well, I thought I paid it,” but it reported before you paid it. Your credit score went down. Now you have a worse interest rate. Now you have a higher payment. Or some missed payment happened. I mean, I hear it all the time from clients, “Oh, I didn’t miss this payment. “Or, you know, “My wife opened up that credit card. “Or something happened and, you know, something reported on your credit that wasn’t originally there and your score tanks. Well, now you can’t qualify at all. Is that a risk that you’re willing to take?Your credit’s gonna have to get pulled as a hard inquiry regardless. And then the other side of it is you cannot run findings. So as a loan officer or anybody in this business will look at a file and- and take a look and say, “Okay, well this could work,” but there’s not a guarantee that it’s gonna work. You have to be able to run findings on the loan. And when you run findings, your credit history comes into play. Major. Your debt-to-income ratio comes into play. The assets that you have come into play. So the sameWhat I mean by that is the same credit score doesn’t work for everybody. You could have a 700 credit score and you could be putting down 5% on the loan and you could have, you know, uh, just enough for the down payment, and it- and it could work. I could have a- a 700 credit score. I could be putting down 10%, but it might not run approved. There’s no guarantee because my credit history might not be as w- good or my- Could trade lines. debt-to-income ratio could be higher. So you really have to pull somebody’s credit as a hard inquiry to be able to run findings to be able to really give somebody a- a real preapproval. You know, otherwise it’s really a prequalification and, you know, it’s not strong. And you know, what a lot of buyers need to understand about kind of everything we’ve talked about so far is the income documents, and this part isthis part is when you want to get your offer accepted and you like, like the house and you want that house, well, I’m gonna call that listing agent for you and I’m gonna be able to go to bat for you that I have all this stuff and verify that with a listing agent to get your offer accepted. Yeah. Or if not, I’m not gonna call that listing agent. That listing agent’s gonna call me and what am I gonna say?I’m not gonna lie to that listing agent and say, “Yeah, I have all their documents. I have a hard credit pull. I ran findings. “No, they, they refused to do that. They weren’t that serious that they wanted to buy this house. They didn’t want me to run their credit. They didn’t wanna give me any documents, so I had to give them a range and that’s what they want to try. You, you tell me if you want to accept that offer. If you’re a buyer, flip it, right?If you were the seller, do you want to accept an offer from somebody who didn’t- Absolutely not. go through any of that?Absolutely not. You keep bringing up and we keep talking about it. It’s a term that we use in the office, in our industry, findings, mortgage findings, and I know that there are AUS findings. And can you elaborate on AUS findings and the importance of having an approve eligible or i- i- imp- approve accept in that process of the preapproval?Can you explain to the viewers, you know, what are findings?Yeah. SoNow you have FHA loans, VA loans, conventional loans, Fannie, Freddie. You run fi- your loan through the automatic underwriting system. What that does is that reads the income, the debt-to-income, your credit, your assets, and what’s needed. Different properties like multi-families will require different reserves. So it’s gonna tell you exactly what’s needed, make sure that they have that, and then also tell you if it’s approved or not approved. Now if you don’t have approved findings, you’re not gonna get approved for the mortgage. Can’t even send it in to the investor. Can’t do anything with it. Maybe you can get lucky and go try to have the most miserable experience of your life and go do a manual underwrite process, have to go to a lender that is gonna take you through the mud, ask for your, you know, your first child. It’s gonna be an absolute nightmare. Yeah. Closing’s gonna get delayed. It’s gonna be an absolute shitshow because you didn’t do what was needed. And now the good thing is, is if you run findings ahead of time and we know we’re good, you’re not gonna have any problems. But also, it may not work, right?Yeah. You know, I just had a file the other day where the credit score was on the lower end but not crazy, crazy low and typically, you know, again, with the percentages, we look at a lot of files. You see what works and what doesn’t work a lot of times. Credit score, in my opinion, if, if you would’ve bet me, “Hey Craig, how many reserves are gonna be needed to make this file work?”Because the lower your credit score is, the more money you need to have for assets to strengthen the file typically. I would have said 2, maybe 3. I could not get the file to run without 6. So if I would’ve gave you a preapproval thinking okay Vern, you have enough assets to cover 2 to 3 months of reserves. We’re gonna be okay. You go get your house under contract and now you need 6 months and I gotta call you and say, “Hey, listen, you need to come up with more money and it can’t be a gift. It needs to be your own funds. “How are you gonna be able to make that work?I think that just goes back to collecting all the documents upfront, finding out if they have a 401, retirement, so you can put that into the system when you run automated underwriting. But you need to have a hard inquiry on your credit to do so. Um, which gets- And at times, uh, when you run especially like you’re l- talking about like a conventional loan or, or more so on a VA loan, s- at times it can be surprisingly how high it can go. Okay. You know I had a client recently that didn’t want me to run his credit but he wanted to do a VA loan. Now VA loans are tricky. They can run really, really high or sometimes they don’t run high at all depending- you say high, what are youWha- what are you talking about theySo your debt-to-income ratio. So- So that means like how much debt you have outstanding?How much you can qualify for based off of your income. Okay. So on a mortgage, everything goes off of your gross income and then the mortgage payment you have 2 ratios. You have your front-end ratio, which is your gross income against the mortgage payment including taxes- Yep. insurance. Then you have your back-end ratio, your gross income against your mortgage payment, tax and insurance included, as well as any debt that’s in your name. Anything on your credit, any liabilities that you have, any child support, alimony, anything like that. How high you can run those numbers is how you qualify for a loan. So it’s not necessarily, you know, what’s the purchase price?It’s really more of what the payment’s gonna be- Yeah. that what’s works. But on a VA loan, you can at times runYou know, on a conventional loan, let’s just kind of back this up. FHA is very easy. Most of the time 46. 99% of your gross income for the front end, 56. 99 on the back end is the max that you can run it. You can never run it any higher. Sometimes it won’t run that high depending on credit score and the strength of file. And then conventional you’re looking about a 50% on both being the max. Okay. So if you have 0 debt in your name, you could possibly run that all the way up to 50% of your gross income for the mortgage payment because you have no debt. If you have debt in your name, that number’s gonna come down because your back end’s now gonna hit 50 at a, at a lower amount. Got it. On a VA loan, VA loans can go even higher than that. I’ve run VA loans up to a 70% back end. Which is wild. Which is crazy. I’m not gonna advise to do that. But you know sometimes there’s, you know, their wife works or somebody else works. Yeah. they have other income, they can afford it but they justThe income that’s being used for the mortgage isn’t there necessarily. And I had a borrower, you know, who didn’t want to run credit and I’mI’m telling him like, “Listen man, I really cannot tell you what you’re gonna qualify for honestly. Like I can give you a range but I’m not gonna send you a preapproval because of this. “And he di- wasn’t happy with that. He didn’t want it. I said, “Okay man, go somewhere else. “He goes somewhere else, wasn’t going well, wasn’t getting the answers he wanted, was getting the runaround, comes back, says, “Okay, do it. “I gave him a preapproval for so much higher in the situation that he wanted and he was so happy about it. But sometimes you have toYou know, you can’t let a borrowerYou can’t let a realtor push you around because y- you really have to protect your relationship. Yeah. And I’m gonna protect the buyer and that agent that I’m working with. I’m not gonna send something out because someone’s mad and they want it. Yeah, I mean, I go back to the number one thing is ourthe buyer that we’re working with and the relationship with. We have to work with these realtors, buyer agents, seller agents. for as long as we’re in the business, they’re in the business, right?So one transaction, I’m not gonna put my name on it, you’re not gonna put your name on it to not have an ar- hard inquiry, not have all the documents, not verify that. And like you said, sometimes they think they can afford a $500,000 house. In fact, they can afford 700, they just might not like that payment, but you wanna have that conversation with the, uh, with the buyer. And I think, like, to your point about that, why, wh- to really kinda dive deeper into why that’s important, y- you know, when you’re a buyer and you’re working with a loan officer, who they are is important in your process. 1, you know, how much you’re gonna be able to learn, the advice you’re gonna get, you know, the education, how comfortable you are. But also, do you wanna work with a loan officer that has a good reputation and a relationship with these people that you’re gonna be putting offers in on?Because my clients and your clients and a lot of the clients that we work with get their offers accepted because of those relationships. Like- Yeah. sometimes it’s not even the highest offer. But if you don’t do that or you go work with a loan officer or a bank that doesn’t have that kinda relationship, unfortunately, you’re not gonna get your offer accepted most of the time because listing agents, realtors know this, right?They know- Yeah. that there are a ton of companies online, there’s a ton of banks, there’s a ton of retail lenders that don’t do the legwork up front. So what do they do?They tell their seller, “We’re not going to accept this offer because I’ve had a bad experience with this bank, I’ve had a bad experience with this lender. These guys aren’t calling me back, I can’t get an answer. “When they can say, “Oh, well, I verified the preapproval with Craig or with Vern. I’ve done a ton of business with this company before, they have a great reputation. You know, they’ve done everything that’s needed,” they’re gonna accept your offer. And I’ve seen where they’re taking an offer and accepting it because it’s a Craig Snell preapproval for 15, $20,000 less than somebody else who’s going in there with a different type of loan with a loan officer or a company that they either don’t trust, never heard of, or just has a bad reputation in the marketplace. There’s a lot of stuff on the line. Like, they could, that seller could be buying another house. It’s a trickle-down effect. They don’t wanna- Yeah. risk and gamble that, oh, hopefully Joe Blow knows what he’s doing and is gonna accept it. I mean, and gonna be able to get it approved, and all of a sudden, a week before closing after no communication- Yeah. the entire time, the deal dies and everyone’s super pissed off. Yeah, I mean, I, I, I used to train a lot of the agents, uh, that I w- I would work with. I’m like, “Listen, you guys can accept another offer. I know that I can’t get on 100% of the business. “Like, do I want 100% of the business?I want 100% of all business in America, right?But I used to joke around with s- you know, my top agents that I would have relationships with. I’m like, “Hey, listen, you can accept another offer. “One of the key components for, for what I coached them on is, if you don’t hear from an appraiser reaching out to you to appraise that property within, like, 5 days of that process starting, you have to start making phone calls ’cause there’s something missing, right?Like, the title work should be ordered. So the seasoned veterans on the real estate side, they’re looking for all those things, and they never have to look for it when they’re working with Milestone or Craig Snell. So, uh, great information. This is another one, uh, another big question we got to, uh, to get answered here today is, what’s the difference between getting prequalified and being preapproved?So kinda going back to a lot of the stuff we talked about, prequalified, maybe you provided some documents, maybe you didn’t provide any documents, not a hard credit pull, findings were not run. Nobody’s going to accept yourUh, if, if you’re, you’re working with a listing or you’re putting an offer in with a listing agent that knows what they’re doing, no one’s gonna accept your, your preapproval. It’s ’cause it’s not a preapproval. No one’s gonna accept your offer, I should say. Yeah, I mean, at that point, somebody maybe just did a soft check, right?You could get a prequalification online in probably 10 seconds by putting in your own information and it’s gonna kick it out a number. Nobody’s going to want to accept that. preapproval is your income documents have been submitted and verified, your assets have been submitted and verified, your credit has been run, findings have been run, and everything is 100%. And really at that point, all that’s gonna be needed is an appraisal, title work, and insurance fund. which is wild. And that goes back to why we can close a loan from start to finish in, you know, I think our average, don’t quote me on this, is right around 14 days, right?Because we’re waiting 7 or 8 days for the appraisal to come in, the title work to come in, and we submit it back to the investor for, for a clear to close. But a lotta other institutions are taking 25, 30, 40 days because they’re doing a lot of that legwork up front to even make sure the file still works. Yeah. While it’s under contract, and I, I always just feel bad for the sellers. Like, they’re packing up their house, they have a family, they have kids, they’re maybe relocating out of state, and the worst possible thing that you can deliver is news, or hear it, right?Like, our clients will be clear to close on buying a house and then we’re getting a phone call, “Yeah, the sellers of that house that our buyers are buying, financing fell through on the house they’re moving to, so we have to hold everything up. “Now you’ve got moving trucks, it’s the end of the month, that moving company is out all of that money, or maybe there’s a deposit involved. So it’s, it’s definitely a, uh, a tricky, tricky situation all the way around. So maybe just starting from the beginning, and, you know, somebody’s out there, they’ve gotten pre-approved, they’ve submitted an offer and they go to purchase and sales. One of the next big questions that we get is, “What’s this deposit?What, what is an EMD?”So your earnest money deposit is your EMD. So whenever you put an offer on a house, typically, you know, depending on the state and how you do things, you’re gonna have a small deposit on the offer, and then you’re gonna have a larger deposit on the purchase and sales to bind the contract. A big misconception is, where does that money go for a buyer, right?You know, you’ve talked to your loan officer, you maybe have an idea of how much money you’re going to need for your down payment. Hopefully you talked to a loan officer and they told you how much money you’re gonna need for your closing costs as well. And then all of a sudden you have a realtor that’s asking you that they need a check for $5,000, $10,000 for the purchase and sales. What that money goes to is your cash to close as a buyer. Yeah. So you’re not, your money’s not going out there and then not going towards your bottom line. I’ll just use easy numbers. For example, if your down payment’s $10,000 on the house and your closing costs are $10,000, you have a $20,000 total investment coming into this contract, you know, whether it, at closing that you would need to bring. Now, if you gave a $5,000 EMD or a deposit, that $5,000 goes towards that. So at closing, you would only be bringing $15,000- That makesbecause they’re gonna hold that money in escrow, and then they’re going to credit you that money at closing. So tell me a little bit about closing costs, right?You brought up closing costs. They’re always moving. I get phone calls, you’ve gotten phone calls. This, this bank quoted me $2,000 for closing costs, this one $5,000, this one $10,000. What are some of the dynamics that go into closing costs?And what I really, on my end, I don’t know, I, I think I know how you operate with a lot of your clients, are, you know, these are the hard costs and then these are the, kind of the variables, the taxes, insurance, at the preapproval stage. You know, what goes into that?So when you’re, when you’re talking to your client, what goes into the closing costs and how does that conversation look like between you and the consumer?Yeah, you kind of have to break it up into 2 sections, because there’s one part of it that we can control to a point, and there’s one part of it that we cannot control to a point. the part of it that we cannot control is really what can vary more than anything. You know, you have kind of more hard costs or fixed costs where you’re, you know, you’re gonna have an un- an underwriting fee, you’re gonna have an appraisal fee, and then you’re gonna have title fees. You know, you’re gonna pay title insurance, you’re gonna pay, have to pay the attorney to do everything. And that’s also, I mean, good point too, is, you know, what a lot of buyers don’t understand is, part of their closing costs are those attorney fees. So, you know, when your realtor’s putting you in contact or your loan officer’s putting you in contact and there’s an attorney that’s gonna help review the purchase and sales for you, or the offer, and then do the title work, that’s all part of the closing cost, you’re not paying that separately. Um, and then you also have your kind of fees that are not so controlled by, by us, or, you know, and, and again, the attorney fees really are not controlled by us. They’re what the attorney fees are. Yeah. So They’re just the hard costs of the transaction. they’re hard costs. You know, you’re probably, you know, depending on where you’re buying and, and, you know, where, how much of the price of the house is, you know, I would say between all of those things, usually around $5,000 to $6,000. So when somebody says, you know, closing costs are $5,000, $6,000, yeah, that’s a part of it. But you’re also gonna have your prepays and your escrow, and that’s where numbers can kind of start to escalate a little bit. So you’re going to have prepaid interest. So the day you close on the house, through the end of that month you’re gonna pay interest, because you pay interest in the rear on a mortgage. Yeah. So when you close in May, you, whatever day in May, so say you close May 1st, but you’re gonna pay interest through all of May. So your closing costs are gonna go up because you’re paying all of May’s interest, and then you’re not gonna have a mortgage payment come June 1st. You’re gonna have a mortgage payment July 1st. Your July 1st mortgage payment is gonna be paying June’s interest, ’cause you pay interest in the rear on a mortgage. Yep. If you close at the end of May, well, your closing costs are gonna go down, because now you’re only paying a few days worth of May’s interest, but your first mortgage payment is still gonna be July 1st. And then you also are going to have your insurance in your taxes. If you decide to have your insurance and your taxes inside the mortgage, your homeowner’s insurance is gonna be a full year that needs to be paid for, usually 3 to 4 months into escrow. Mm-hmm. Because come next year, your in- your insurance is gonna have to get paid by the servicer on the loan. Well, you’re not gonna make 12 mortgage payments by the time- Yeah. next year comes. You close in May. At some point in April, that insurance is gonna have to get paid. Well, you closed in May. I just told you that your first mortgage payment’s July 1st. Do the math. You’re not making 12 mortgage payments. That’s where the escrow, that, that’s where the escrows come in. Taxes are on the same thing, just usually on a shorter scale. Most taxes are either quarterly or semi-annually depending on where you’re buying. Same thing. If there’s a tax bill that’s due before your first mortgage payment, the attorneys are gonna hold that as a prepaid and then pay it out of your closing costs at closing. And if the tax bill’s gonna come in after, you’re gonna have to prepay a little bit of money, put that into escrow so that the servicer can pay your taxes. And then once a month when you make your mortgage payment, one 12th of your insurance goes into that payment and one 12th of your yearly taxes go into that payment to continue to add into those escrow accounts to be able to disburse those funds. This isn’t, uh, one of the questions that came up, but I get it a lot with my clients. Can I waive my escrows?And it’s a very vague question in our business. Um, you know, what do youHow do you determine if somebody can waive escrows on a, on a loan?Depends on what type of loan you’re doing, depends on what lender you’re going to, and what their guidelines are. So, you know, we have lenders who will let you waive escrows even if you’re just putting down 5% on the house. We have other lenders that will require 30% to be down before you can waive escrows on a conventional loan. If you’re doing an FHA loan, you can’t waive escrows. Your escrows are gonna have to be inside the mortgage payment, and it’s gonna have to be taken care of that way. Whether you waive escrows or you don’t waive escrows, I mean, you’re, you’re looking at the same amount of money, which is what people don’t really fully understand. It’s just more of you need to kind of bring some more money to closing to pad those accounts, but then you don’t have toEither way, you have to save the money, right?You’re pay it- Yeah. at some point. If your taxes are due in 3 months, you’re paying them or they’re paying them. It’s the same amount of money. I always used to tell my clients, especially on first-time homebuyers, just let the investor, the bank, pay your tax and insurance. It’s one less thing you have to worry about. You know, everybody has bills that come up. You buy a new house, you’re gonna have lawn mowers, you’re gonna have stuff you’re gonna do to the house. Next thing you know, you get a tax bill for 3,000, 3,500, you don’t have the money. That’s a problem, right?The towns want to get paid their taxes, or you definitely don’t wanna let your insurance lapse because then the investor will put on a insurance policy on that. That’s gonna be a lot more expensive. Expensive, yeah. So, um, just another one, just going right back into the closing costs, can I roll closing costs into my mortgage?Into your loan?No, you can’t. So what you can do is you can get a seller credit, so a credit from the seller to be able to offset your closing cost. There’s percentages that there’s a max of, so y- depending on the type of loan you’re doing and how much money you’re putting down depends on how much money from the seller you can get. Most of the time, it’s enough to cover y- your closing costs. Yeah. Um, it’s not always enough. Uh, you know, on a conventional loan, if you’re only putting down 3% or 5%, the max seller concession you can have is 3% of the purchase price. So if you’re at a lower purchase price number, sometimes that’s not enough to cover, but as the price of the house goes up, that percentage is usually enough to cover. On an FHA loan, you can get up to 6% back, so that’s usually plenty- Way more. and then some. Yeah. You know, you don’t really need that much. But that’s really how you have to do it. I mean, you canIf you were gonna put down 25% on, on your down payment, and you wanted to just remove some of that money out of your down payment to cover your closing costs, so your total out-of-pocket cost is 25%, you can, but your loan-to-value changes that way. Changes,You can’t just roll it in, so you have to, if you don’t wanna change the amount of money that you’re putting down on the loan, you have to then get a seller concession to be able to credit it. So let’s, uh, let’s jump into that as you said that. So I, I get this a lot, too. So separating closing costs and down payment. You just said you can get a seller credit for the closing costs. you know, a lot of homebuyers say, “Hey, can I just have the seller pay for my down payment?Do I have to have all of the funds for my down payment on my own?”Are you going to jump into, you know, kind of how that works?And that’s a pretty flat line. Yeah, there’s no way for the seller to pay your down payment. So if, doesn’t matter if your closing costs are $10,000 and your down payment’s $10,000 and you get a $20,000 seller credit, none of that seller credit, none of the funds from the seller can go towards your down payment. So no matter what, in any purchase, whatever your minimum down payment investment is on the loan type that you’re doing, take an FHA loan, 3. 5%, no matter how much of a seller credit you have, you have to physically bring your 3. 5%. No matter what. No matter what. So if you gave a $5,000 EMD, that $5,000 EMD can go towards your down payment, and then you would need to bring in an additional $5,000 at a minimum, no matter how much of a seller credit you have. So sometimes people get too much of a seller credit, and they’ll get, uh, you know, thinking maybe they’re working with a, they didn’t talk to a loan officer or they’re working with an agent that wasn’t sure and they got a bigger one and they think, “Oh, well, great, now I don’t have to bring all this money. “most of the time, a few days before closing, when they go to balance everything, they’ll be like, “You have an excess seller credit here. “So now they gotta back increase your minimum investment to make the minimum investment that you need on the loan, so your cash to close will go back up to meet your minimum investment, and then your seller credit excess will be there. Now you either need to try to use it to burn it up to buy down the interest rate, or it’s gonna go back to the seller. credit that’s not needed unless you wanna buy down the interest rate. Yeah, that’s great information. Uh, one of the other big, big things that we see after you go under contract, you’re- ch- you signed your purchase and sales, you’ve done your home inspection, now your loan is getting disclosed by your loan officer. And, uh, there’s probably about 40, 40 pages of the- the initial set of the loan disclosure- uh, loan docs that go out. The most important one is being the loan estimate, and the importance of the loan estimate, uh, I hear it a lot, like, “Hey, I’m gonna send you a loan estimate from this investor. I want you to match. “It’s like, uh, it’s a loan estimate. Can you jump into, you know, what to look for on a loan estimate?A couple of key pieces, uh, I want you to touch on is your loan intere- is your interest rate locked- Mm-hmm. on that loan estimate?Because a lot of times, you just get a loan estimate, somebody put a crazy interest rate on there that doesn’t even exist. Yeah. And then you go to the next page and you’re like, “Well, you’re paying for that rateSo, I’ve had a ton of clients who, you know, have said, “Oh, well, I’m getting a better rate from somebody else. I’m gonna go with them. “Okay, you know, “Hey, send me the loan estimate. I’ll see, make sure that it makes sense or that it works. “And, uh, you know, are they told a certain rate?Well, that rate’s not locked in. So in the top right section of your loan estimate, it says, two check boxes, yes or no. Is your rate locked or is it not locked?If it’s not locked, well, there’s no guarantee you’re getting thatRates change on a daily basis. They change multiple times a day, so there’s no guarantee on the rate that you’re gonna get. Sometimes they’re putting in a rate that they’re hoping the market gets to and they don’t have it locked. Now, the other piece of it is, is what that interest rate is, and then are you paying for the interest rate or not, right?So in box A on the loan estimate, the second page of the loan estimate. The first page is gonna be set up where you’re gonna see in the top left corner is going to be the purchase price. It’s gonna show your loan amount below it. It’s gonna show your interest rate. It’s gonna show your estimated principal and interest payment. It’s gonna show your estimated escrow payment. On the bottom of the page it’s gonna give you your estimated closing cost and then your estimated cash to close. Two separate things. Your estimated closing costs are your closing costs on the loan, your taxes, your insurance, your attorney fees, and any of the closing costs that are involved in the transaction. Your estimated cash to close is how much money you need to bring to closing. That could be a combination of your down payment, your closing cost, and then subtracting out of whatever credit you’ve already had. Sellerseller credit. EMD. An EMD. So if your down payment is 10,000, your closing costs are 10,000, you would expect to bring 20, but your cash to close number’s only showing 10. Well, that could be because you have a $10,000 seller credit that’s offsetting 10 of, of the money. Now you only have $10,000 remaining, your cash to close. That cash to close number is what you can expect to bring. Now, on an initial loan estimate, that number can change. You don’t have the taxes yet. We don’t have everything prorated. We don’t have the insurance binder. We’re sending out an initial loan estimate kind of to give you a general idea of what the numbers are gonna be. There’s some fixed costs there that can’t go up. They can only go down, but your taxes and insurance can change. So now you go down to the second page of your loan estimate, that’s where you’re gonna see a breakdown of all your closing costs. Box A is gonna show if you’re paying any points or a massive origination charge. So, if somebody’s telling you a really low rate and, you know, the market’s saying a higher amount, or the loan officer you’re talking to on the other side is saying that n- no way that’s, that’s real. Typically, there’s gonna be a- It’s in box there. large cost there. So, you know, I’ve seen so many loan estimates where you’re telling me you’re getting 6%, I’m telling you that, you know, rates are at six and a half, and you send me a closing, uh, a loan estimate and your closing costs are $30,000 and mine are $10,000 because you’re paying $15,000 or $20,000 to buydown your interest rate, where I’ve sent them a loan estimate where there’s no cost to buydown the interest rate. which we see a lot of the times. And the consumer unfortunately only sees the interest rate 6%. Yeah. That- Which wild. that’s, that’s like the biggest thing that I would feel like, you know, with consumers who don’t know. It, you gotta look at the overall picture. You need to look at what the total closing costs are, what your cash to close is, not just what the interest rate is, because there’s so many companies out there that that’s their business model. Yeah. And they just wanna tell you a very low rate, and then they just pump all these fees and pump all these points into it to get you that, and you don’t realize it, and all of a sudden you’re paying, and it doesn’t even make financial sense. No. You know, you’re paying thous- No sense totens of thousands of dollars to have a lower interest rate that’s only changing your payment a couple hundred dollars, that your return on investment’s gonna be eight years down the line. Yes, save Nine years down the line. andyou just told me that you’re only gonna live there for three years and then you’re gonna sell the house. How, how does that make sense?Or wait for the interest rates to go down and real- Yeah. Right?If you’re gonna spend even $8,000, $12,000 to buy a rate down to save $200 a month, 200- Your return on a month, 2400-pretty far down the line. a year you’re gonna save on the payment but you’re fronting out $12,000. They’re like, “Well, it’s a seller credit. “Well, you increased your, your purchase price- price. to get to that seller credit, so- Yeah. there’s- E- easy way for anybody out there to know, like, if it’s worth buying the interest rate down or not, take the amount in points that you’re paying, or the cost that you’re taking to buy the interest rate down. Ask your loan officer, “What is the rate without me having to pay it?What’s the payment on that, and then what’s the payment with buying the interest rate down?”Do the math. If it cost me $10,000 to buy it down and it’s changing my payment $200, take $10,000, divide it by $200 a month, and that’s gonna tell you how many months it’s gonna be before you just break even. So you just make back up the money that you just spent, and then after that it’s gravy. But-You’re gonna be- if you’re at a point where you’re five, six, seven years down the line and rates are gonna go down, you just wait, and you’re gonna refinance in a year or two. if they don’t go down. Even if they don’tLife changers, right?Like, increase the family size, job relocation. Like, the average person does not keep the house for 30 years. That’s why, like, when I look at thatAnd I’ve had clients like, “No, I wanna spend, I wanna buy it on the rate I’m like, “I don’t know. I don’t suggest that. “Yeah. Unle- unless the rates are super, super, super low and your, your plan is to never leave that house- Yeah. and never do anything with that mortgage, and you just wanna pay as least amount on it as possible. Okay, yeah, it’s a good idea at that point. But right now, I mean, you know, if you’reAnd a lot of times, it’s people who don’t necessarily have, like, a ton of money in the bank. I’m like, “Put the” But they have this fixed payment that they want in their head. I’m like, “Put the money in your bank account or go put it in a high-yield savings account, or go put it somewhere it’s gonna make you some money. “Pull the additional couple hundred dollars a month that you’re gonna pay- Out of the savings account. to it. And I probably, is a very good chance that you’re gonna be able to refinance that before you burn up that $10,000. Yeah. This is, uh, this is another question about the loan estimate. And, uh, it’s very common and usually it sparks the, the home buyer to call immediately, right?So they get the initial set of disclosures. You go over the loan estimate, you explain to them, like, “These are very beginning type numbers. We don’t have insurance, we don’t have the taxes back. We don’t know what day or month you’re gonna close. Seller credit might not be finalized. The home inspection, you might be able to negotiate, things like that. “But after they sign that one, they get through it, they’re gonna get a handful of other additional loan estimates every single time something changes in the loan. But, uh, w- you know, for that home buyer out there, what’s gonna make their payment go up or down from the initial loan disclo- uh, loan estimate to, you know, maybe the third or the fourth one as you go through the process?Typically, it’s gonna be your taxes and your insurance. So when you start the process and, you know, we don’t have an insurance quote or we don’t have taxes from the attorney’s office or, you know, maybe we’re able to pull them online, but they’re, you know, from last year or, you know, they’re a few months old, or whatever the case is. Uh, you know, as those numbers come in, so, you know, as you, as a consumer you finalize and you get your insurance binder, and that gets sent over to the lender. Okay, we’re gonna put that in, we’re gonna adjust the numbers. Maybe that decreased the numbers, maybe that increased the numbers a little bit. It would increase two things. It would increase your c- i- if the number was higher, so just giving an example, right?If we said it as a estimate that your insurance on your house was gonna be fif- $1,500 a month, and then you end up getting a policy that’s $2,000 a month. closing costs are gonna go up too because now you’re collecting more money to pay the higher policy as well as your monthly payment’s gonna go up because of that. Same thing for taxes. Obviously you don’t control the taxes that you- Yeah. pick on the property. But, um, you know, at times taxes can change. There’s times of the year that’s it’s im- literally impossible to know what the taxes are because the new ones are just coming out. So, like, the attorneys are having to call the town to get them, to find out what 2025 taxes are going to be as an estimate, that can change. So, you know, you have to be a little bit flexible and understand that an initial loan estimate isn’t going to be finalized. But most of the time, I mean, it’s pretty close. We try to do our best job on giving an accurate portrayal of what those costs- Yeah. are gonna be. And unfortunately, you know, we’re here to help homeowners and people buying properties, really just educate people. But one of my pet peeves over the last 20 years, you know, f- I’m talking about the old HUDs to the loan estimates now, to the, all the way to the closing disclosure, you really can’t fake it at the end, it’s when, you know, the, a home buyer brings me their loan estimate and they have $40 for homeowner insurance, and they have $200 for taxes. And in the top of my head, I’m like, “You’re buying a house in, I don’t care what town in America, right?More times than not, your insurance is not $25 a month, and your taxes are not gonna be $200. “And that brings down their payment, which all home buyers areThat’s the number one thing. People always think, “What’s my interest rate?What’s my interest rate?”The reason they’re asking that is because they just want the, the, their payment. They have a set payment in mind that they want, and that the loan officer is giving an unrealistic portrayal of really what that mortgage payment is by reducing those two items to something they’re not gonna close at. I, I’ve had people where, um, they’re telling me the rate they’re getting. Like, say it’s a realtor that trying to refer, you know, a client over that’s already been working with somebody else, and they’re like, “Oh, well, you know, my payment on this house is gonna be $2,500. “Yeah. I’m like, “Well, what’s the rate that they have?”Okay, their rate’s 6 1/2. Okay, well our rate would be 6 1/4. Well, what’s the payment?”Well, how come the payment’s higher?”they’re u- like, send me what they’re sending you and it’s just an insane amount and, or they’re, like, super decre- not only, like, do peoplePeople try to make things look better because they wanna try to pull a fast one over on people. Yeah. And I don’t like doing that at all. I like to actually explain, like, where these numbers are coming from and that they’re not set, this is a pretty well-educated guess on what the numbers- Yeah. are gonna be, but this could change because of X, Y, and Z. And where people don’t do that, and then also how many months they show to collect for. Yeah. Right?2 months, one month- Yeah. worth of an escrow balance, like- maybe, but very, very rare chances, you know?If you, uh, like you said in that scenario earlier, you’re buying the house May 2nd. Tax bill is due June 1 in most towns, right, or, or cities that they’re in. They’re collecting for the, that next quarter’s taxes 3 months, a cushion, plus the, the month of May that you’re in there. It’s a minimum 5, 6 months, and then I, I’ll look at a loan estimate and somebody’s got one month worth of taxes being collected or 2 months worth of insurance, but never paid the policy up front that was gonna be a $1,500 policy. They left that $1,500, so now the cash to close is off. And once you really start educating them and you tell them, “Listen, go call your loan officer, but this is where it should be. “It’s, it’s breaking- call him out on it. breaking, you know, it’s comparing apples to apples, not apples to oranges- Yeah. really, is that the end of the day is how, you know, uh, you need to look at it. You need to look at every individual section and compare what’s different and what’s not different and not just the total number. Because you could be under contract on a house and you ask for a loan estimate and you, your loan officer sends you one, closing costs are $3,000 less than me, and you’re like, “Oh,” you know, even though your rate’s a little bit lower or the same, your closing costs are so much higher. And then you compare that is the closing date’s the 5th of the month, but you as a lo- your loan officer sent you a loan estimate with one day of daily interest and very low taxes and insurance and it’s not accurate. Those things are gonna change. No loan officer can control that. NoYeah. They’re gonna change on you. Now you just got false hope and it’s gonna change on the backside and it’s not the right way to do things, or that loan’s not locked and then it goI, I get that all the time. People go somewhere else because they get a better rate. They call me weeks later all pissed off because the rate went up and something changed and I’m like, “Hey, you know, that’s not the way we do business,” but unfortunately people out there do. This is why, this is why I believe loan officers like yourself win. So you can go through this whole process as a homeowner, uh, home buyer, right?Get all of these loan estimates and they’re gonna get a little bit more accurate as it goes, but soon enough the title company and the attorneys get involved and the final document that everybody sees is what’s called the closing disclosure. And that’s where the rubber meets the road per se, right?Like, that’s where it’s like, “You told me my taxes were $150 on this house, so I only had to pay for one month worth of insurance,” and that closing disclosureCan you explain the difference between the loan estimate and the final closing disclosure, or what everybody uses in terms is the CD?So the loan estimate is what it’s called. It’s an estimate. Typically there’s no insurance policy. It’s an estimate of whatever the loan officer or the disclosing team put on it. Taxes, the same thing. Uh, you know, there’s no finalized fees on any side of it, you know, whether it’s the attorney fees or anything from the seller’s side. The final closing disclosure is going to be when everything is finalized. So you’re gonna have, 1, your rate’s gotta be locked in to have a closing disclosure. Your insurance policy has to be set. The taxes have to be finalized. And then there’s tw- there are, I mean, there’s 2 different things. There’s an initial closing disclosure and then there’s your final. Final. So we’re talking about final one here, so now the attorney has gone in, they’ve balanced everything. Put the day’s closing that’s accurate. So the right closing date on it, which hopefully, I mean, you, that you should have that already, but that’s not always the case. But taxes can change at the very end. So you could get an initial CD and then it can slightly change from your final because they’re gonna get information from the seller’s side that nobody has that early in the process. Yeah. Right?You could have a propane tank in the house and now you have to, as the consumer, you have to pay for what is left in that propane tank. So they’re gonna get a reading- adjustments. The oil adjustments. Uh, s- I’ve seen trash adjustments before. I mean- Water, final water readings. water readings. Um, you know, there, there’s all kinds of things, but even just taxes, right?You know, sometimes, all right, they found out that the, uh, you know, the seller’s already paid the taxes for that quarter so they’re gonna move some numbers around. You’ll see some numbers shift. You know, it might have shown that you were gonna pay 3 months into prepaids for your taxes and now it’s only showing one month, but it’s gonna show, you know, uh, in a line item on other where it’s now paying the seller because they’ve already paid the taxes. So your numbers can shift over a little bit. Most of the time there should not be a big difference between your initial closing disclosure and your final- Yeah. closing disclosure, but the differences will be those things. It’ll be any kind of a proration that the attorney puts in, you know, anything like a final, uh, oil, propane or, you know, the taxes shifting around is typically what adjusts. When that home buyer gets the initial closing disclosure, I’m glad you separated those 2, what was the trigger to send out that initial closing disclosure?So when a loan officer says this, what is that initial trigger for somebody to get an- So-initial CD?to be able to have an initial CD, which, by the way, your initial closing disclosure has to be signed 3 days prior to closing. Yep. So if you don’t have that signed or out and signed 3 days before closing, you are not closing. So if you were trying to close tomorrow and that initial CD came out today, it is impossible. You cannot close. So the faster that that gets out, the better the chances that you don’t have any issues. So, you know, different lenders operate a little bit differently and we have a bunch that operate all, all, all- Oh, right. kinds of different ways. You know, the, the way to, to explain it to you guys on what the most strict way is is the appraisal has to be in, the taxes have to be in-the insurance policy has to be in and the loan has to be locked. All of those things have to happen before that initial CD goes out. That’s a lot- Yeah. that has to come in. That’s a lot, right?So the initial CD at milestone and I’m working with Craig Snell. I get my initial CD. At that point are you confident in telling the borrower, like, we’re at, we’re on the, we’re on the 5yard line, we gotta just punch this thing home, right?Because you’ve already done all the proper preapproval, it’s gone through underwriting, you’ve now locked in their interest rate, you have the taxes, you have the insurance, their payment, pretty much wrapped up, it’s done. The payment’s locked in at that point, for sure. You’re done,So- The only thing that would, you know, I would say there is that could slightly change would be the cash to close, just because of those things we just- base interest and yeah. we just talked about. You know, some prorations that can come up or pop up where there’s some adjustments one way or another that the attorney’s gonna put in at the end. And they can’t do those things ahead of time. No. Like if you’re a consumer it’s really important to understand that the numbers will change and it’s not because you’re working with somebody that doesn’t know what they’re doing. It’s impossible to have- Yeah. e- all that information ahead of time and a lot of times they’re waiting on things from the seller side to be able to do that, so you can’t get everything 100%. But it’s important to, you know, the numbers shouldn’t vary too much. And a lot of times what happens is, on our side, you know, we over-disclose to protect the consumer. Yep. I’d rather give you a number that’s slightly higher in, in, in the hopes- Worst case. that everything comes down ’cause we have to verify the funds that are needed too. So I don’t want my team working on going to try to verify $10,000 and then at the last second, all that was bullshit and now we need $12,000 verified and you don’t have $12,000. Big problem. Big problem, right?So I’d rather verify 12, make sure we’re good, and then at the end it’s 10 and you’re happy- Yeah. because it’s lower. There’s numbers that, you know, come down. Like there’s numbers on a loan estimate that go in there because we don’t know. Your employer could charge us a verification employment fee. Yeah. Your employer might not charge us. Well, we don’t know that ahead of time so we’re gonna put the fee on there and if they don’t charge us, we take it off. That’s a, th- that’s a great piece to bring up is a lot of the third party costs associated that show up on a loan estimate or a closing disclosure, uh, you know, I, I, I used to get this question all the time, “Why am I paying”Uh, I’m just gonna use ab- the numbers here. “$100 for a credit report or $75 for this. “And then you have to explain to the consumer, “We can’t charge you more than what we’re actually being charged for a credit report or a, an appraisal,” right?Why, why is the appraisal, um, $575 or $800 or whatever it is on a multifamily?We can’t charge any more than the appraiser’s charging for those third party fees. Um,That’s- And what, what can happen is you don’t know exactly what those fees are ahead of time, so w- there’s like a ceiling, a cap that it can be. Yeah. So we’ll set the cap and then we’ll adjust down. So, you know, if you’re, w- we might set a cap date, you’re, uh, on the initial loan estimate day, your appraisal’s $650. Well, an appraiser might pick it up and do it for $550. We don’t charge you the $650. Right. We adjust it to what’s on the invoice. Same thing on credit reports, same thing on verification employments. So there’s, you know, there, there’s some numbers that can come down a little bit, but there’s some numbers, you know, more on the prepaid side that can go up a little bit. Yep. That’s great. Craig, it’s been, uh, it’s been fun going over the p- preapproval process, running findings, I think that was, tha- that was key in going all the way through the loan estimate and the close and disclosures. Yeah, I think this is a great episode, you know, for, for people who are looking to buy a house or maybe they’ve even bought a house before and they never really kinda learned about the process or what to expect because, you know, and, and don’t be afraid to talk or ask your loan officer questions. You know, if your loan officer is not out there preemptively answering these questions for you or giving you this kind of a breakdown ahead of time, ask them the questions. Like don’t sit back and just hope that everything’s okay. It’s okay to ask questions because, you know, if you’re not 100% sure you should be asking questions and figuring out what’s going on. But a loan officer should be very easily able to explain these things to you. I think this is a great episode and you just said it, it doesn’t matter if you bought one house, you’ve never bought a house or you’ve bought 10 houses, this isn’t what you do for a living. So that loan officer should be that person, that support to walk you through, educate you because listen, we’ve all done things 3 times in our lives, 5 times in our life. You don’t remember. When you’re not a professional. Yeah. True. Once it’s done, I’m out. Like it’s already outta my brain- Yeah. I’m moving on, right?So, uh, great job, man. Keep it up and, uh, onto the next one. Mortgage Daddies. See you guys.